(c) criminal or penal offences;
(d) reporting or record keeping of transfers of currency or other monetary instruments when necessary to assist law enforcement or financial regulatory authorities; or
(e) ensuring compliance with orders or judgements in adjudicatory proceedings.
Article 16. General and Security Exceptions
1. Subject to the requirement that such measures are not applied by a Contracting Party in a manner which would constitute a means of arbitrary or unjustifiable discrimination against, or a disguised restriction on investors of the other Contracting Party and their investments in the Territory of the former Contracting Party, nothing in this Agreement shall be construed so as to prevent the former Contracting Party from adopting or enforcing measures:
(a) necessary to protect human, animal or plant life or health;
(b) necessary to protect public morals or to maintain public order, provided that the public order exception may only be invoked where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society;
(c) necessary to secure compliance with the laws or regulations which are not inconsistent with the provisions of this Agreement including those relating to:
(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on contract;
(ii) the protection of the privacy of the individual in relation to the processing and dissemination of personal data and the protection of confidentiality of personal records and accounts; or
(iii) safety; or
(d) imposed for the protection of national treasures of artistic, historic or archaeological value.
2. Subject to paragraph 3 of Article 13, nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or enforcing measures:
(a) which it considers necessary for the protection of its essential security interests:
(i) taken in time of war, armed conflict, or other emergency in that Contracting Party or in international relations; or
(ii) relating to the implementation of national policies or international agreements respecting the non-proliferation of weapons; or
(b) in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
Article 17. Temporary Safeguard Measures
1. A Contracting Party may adopt or maintain restrictive measures with regard to cross-border capital transactions as well as payments or transfers including transfers referred to in Article 15 for transactions related to investments:
(a) in the event of serious balance-of-payments and external financial difficulties or threat thereof; or
(b) in exceptional cases where movements of capital cause or threaten to cause serious difficulties for macroeconomic management, in particular monetary and exchange rate policies.
2. Restrictive measures referred to in paragraph 1 shall:
(a) be applied in such a manner that the other Contracting Party is treated no less favourably than any non-Contracting Party;
(b) be consistent with the Articles of Agreement of the International Monetary Fund;
(c) not exceed those necessary to deal with the circumstances set out in paragraph 1;
(d) be temporary and be phased out progressively as the situation specified in paragraph 1 improves;
(e) be promptly notified to the other Contracting Party; and
(f) avoid unnecessary damages to the commercial, economic and financial interests of the other Contracting Party.
3. The Contracting Party which has adopted any measures under paragraph 1 shall, upon request, commence consultations with the other Contracting Party in order to review the restrictions adopted by the former Contracting Party.
Article 18. Prudential Measures
1. Notwithstanding any other provisions of this Agreement, a Contracting Party shall not be prevented from taking measures relating to financial services for prudential reasons, including measures for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by an enterprise supplying financial services, or to ensure the integrity and stability of its financial system.
2. Where the measures taken by a Contracting Party pursuant to paragraph 1 do not conform with this Agreement, they shall not be used as a means of avoiding the obligations of the Contracting Party under this Agreement.
Article 19. Intellectual Property Rights
1. The Contracting Parties shall grant and ensure the adequate and effective protection of intellectual property rights, and promote efficiency and transparency in intellectual property protection system. For this purpose, the Contracting Parties shall promptly consult with each other at the request of either Contracting Party. Depending on the results of the consultation, each Contracting Party shall, in accordance with its laws and regulations, take appropriate measures to remove the factors which are recognised as having adverse effects to the investments of investors of the other Contracting Party.
2. Nothing in this Agreement shall affect the rights and obligations of the Contracting Parties under multilateral agreements in respect of protection of intellectual property rights to which the Contracting Parties are parties.
3. Nothing in this Agreement shall be construed so as to oblige either Contracting Party to extend to investors of the other Contracting Party and to their investments treatment accorded to investors of a non-Contracting Party and to their investments by virtue of multilateral agreements in respect of protection of intellectual property rights, to which the former Contracting Party is a party.
Article 20. Taxation Measures
1. Nothing in this Agreement shall affect the rights and obligations of either Contracting Party under any tax convention. In the event of any inconsistency between this Agreement and any such convention, that convention shall prevail to the extent of the inconsistency.
2. Articles 2, 3 and 6 shall not apply to taxation measures.
Article 21. Health, Safety and Environmental Measures and Labour Standards
Each Contracting Party recognises that it is inappropriate to encourage investment by investors of the other Contracting Party and of a non-Contracting Party by relaxing its health, safety or environmental measures, or by lowering its labour standards. To this effect, each Contracting Party should not waive or otherwise derogate from such measures or standards as an encouragement for the establishment, acquisition or expansion of investments in its Territory by investors of the other Contracting Party and of a non-Contracting Party.
Article 22. Denial of Benefits
1. A Contracting Party may deny the benefits of this Agreement to an investor of the other Contracting Party that is an enterprise of the other Contracting Party and to its investments if the enterprise is owned or controlled by an investor of a non-Contracting Party and the denying Contracting Party:
(a) does not maintain diplomatic relations with the non-Contracting Party; or
(b) adopts or maintains measures with respect to the non-Contracting Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Agreement were accorded to the enterprise or to its investments.
2. A Contracting Party may deny the benefits of this Agreement to an investor of the other Contracting Party that is an enterprise of the other Contracting Party and to its investments if the enterprise is owned or controlled by an investor of a non-Contracting Party or of the denying Contracting Party and the enterprise has no substantial business activities in the Territory of the other Contracting Party.
3. For the purpose of this Article, an enterprise is:
(a) "owned" by an investor if more than 50 percent of the equity interest in it is beneficially owned by the investor; and
(b) "controlled" by an investor if the investor has the power to name a majority of its directors or otherwise to legally direct its actions.
Chapter II. DISPUTE SETTLEMENT
Article 23. Settlement of Dispute between the Contracting Parties
1. Each Contracting Party shall accord sympathetic consideration to, and shall afford adequate opportunity for consultation regarding, such representations as the other Contracting Party may make with respect to any matter affecting the implementation of this Agreement.
2. Any dispute between the Contracting Parties as to the interpretation and application of this Agreement, not satisfactorily adjusted by diplomacy, shall be referred for decision to an arbitration board. Such arbitration board shall be constituted for each dispute in the following way. Within sixty days from the date of receipt by either Contracting Party from the other Contracting Party of a note requesting arbitration of the dispute, each Contracting Party shall appoint an arbitrator. The two arbitrators shall select a third arbitrator who, upon approval by both Contracting Parties, shall be appointed as the Chairperson, provided that the third arbitrator shall not be a national of either Contracting Party. The Chairperson shall be appointed within sixty days from the date of appointment of the other two arbitrators.
3. If the necessary appointments referred to in paragraph 2 have not been made within the periods referred to in that paragraph, either Contracting Party may, unless otherwise agreed, request the Secretary-General of the Permanent Court of Arbitration at The Hague to make such appointments.
4. The arbitration board shall determine its own procedural rules, after consultation with both Contracting Parties. The arbitration board shall decide the dispute in accordance with this Agreement and the rules and principles of international law applicable to the subject matter. The arbitration board shall within a reasonable period of time reach its decision by a majority of votes. Such decision shall be final and binding.
5. Each Contracting Party shall bear the cost of the arbitrator of its choice and its representation in the arbitral proceedings. The cost of the Chairperson of the arbitration board in discharging his or her duties and the remaining costs of the arbitration board shall be borne equally by the Contracting Parties.
Article 24. Settlement of Investment Disputes between a Contracting Party and an Investor of the other Contracting Party
1. In the event of an investment dispute between the claimant and the respondent, they should initially seek to resolve the dispute through consultation and negotiation, which may include the use of non-binding, third-party procedures.
2. In the event that a disputing party considers that an investment dispute cannot be settled by consultation and negotiation:
(a) the claimant, on its own behalf, may submit to arbitration under this Article a claim:
(i) that the respondent has breached:
(A) an obligation under Chapter I; or
(B) an investment agreement to which the claimant is a party; and
(ii) that the claimant has incurred loss or damage by reason of, or arising out of, that breach; and
(b) the claimant, on behalf of an enterprise of the respondent that is a legal person that the claimant owns or controls directly or indirectly, may submit to arbitration under this Article a claim:
(i) that the respondent has breached:
(A) an obligation under Chapter I; or
(B) an investment agreement to which the enterprise is a party; and
(ii) that the enterprise has incurred loss or damage by reason of, or arising out of, that breach.
3. At least ninety days before submitting any claim to
arbitration under this Article, a claimant shall deliver to the respondent a written notice of its intention to submit the claim to arbitration (hereinafter referred to as "notice of intent"). The notice of intent shall specify:
(a) the name and address of the claimant and, in the case of subparagraph 2(b), the name, address and place of incorporation of the enterprise;
(b) for each claim, the provision of Chapter I or of investment agreement alleged to have been breached and any other relevant provisions;
(c) the legal and factual basis for each claim; and
(d) the relief sought and the approximate amount of damages claimed.
4. Provided that six months have elapsed since the events giving rise to the claim, a claimant may submit a claim referred to in paragraph 2 to the arbitration:
(a) under the ICSID Convention, provided that both Contracting Parties are parties to the ICSID Convention;
(b) under the ICSID Additional Facility Rules, provided that either Contracting Party, but not both, is a party to the ICSID Convention;
(c) under the UNCITRAL Arbitration Rules; or
(d) if the disputing parties agree, under any other arbitration institution or arbitration rules.
5. A claim shall be deemed submitted to arbitration under this Article when the claimant's notice of or request for arbitration (hereinafter referred to in this Article as "notice of arbitration"):
(a) referred to in paragraph 1 of Article 36 of the ICSID Convention is received by the Secretary- General of ICSID;
(b) referred to in Article 2 of Schedule C of the ICSID Additional Facility Rules is received by the Secretary-General of ICSID;
(c) referred to in Article 3 of the UNCITRAL Arbitration Rules, together with the statement of claim referred to in Article 20 of the UNCITRAL Arbitration Rules, is received by the respondent; or
(d) under any other arbitration institution or arbitration rules selected under subparagraph 4(d) is received by the respondent, unless otherwise specified by such institution or in such rules.
6. Each Contracting Party hereby consents to the submission of a claim to arbitration under this Article in accordance with this Agreement. In the case of a claim submitted pursuant to subparagraph 2(a) (i) (B) or 2(b) (i) (B), if the investment agreement provides a provision that designates forum for dispute settlement, such provision shall not be construed as the revocation or exclusion of such consent with respect to a claim alleging a breach of the investment agreement.
7. Notwithstanding paragraph 6, no claim may be submitted to arbitration under this Article if more than three years have elapsed from the date on which the claimant first acquired, or should have first acquired, knowledge of the breach alleged under paragraph 2 and knowledge that the claimant in the case of subparagraph 2(a) or the enterprise referred to in subparagraph 2(b) in the case of that subparagraph has incurred loss or damage.
8. No claim may be submitted to arbitration under this Article unless:
(a) in the case of subparagraph 2(a):
(i) the claimant consents in writing to arbitration in accordance with the procedures set out in this Article; and
(ii) the claimant waives in writing any right to initiate or continue before any court under the law of either Contracting Party, or other dispute settlement procedures, any proceedings with respect to any measure alleged to constitute a breach referred to in subparagraph 2(a) (i); and
(b) in the case of subparagraph 2(b):
(i) both the claimant and the enterprise referred to in that subparagraph consent in writing to arbitration in accordance with the procedures set out in this Article; and
(ii) both the claimant and the enterprise referred to in that subparagraph waive in writing any right to initiate or continue before any court under the law of either Contracting Party, or other dispute settlement procedures, any proceedings with respect to any measure alleged to constitute a breach referred to in subparagraph 2 (b) (i).
9. The waiver provided pursuant to subparagraph 8(a) (ii) or 8(b) (ii) shall cease to apply where the arbitral tribunal rejects the claim on the basis of a failure to meet the requirements of paragraph 3, 4, 7 or 8, or on any other procedural or jurisdictional grounds.
10. Notwithstanding subparagraphs 8(a) (ii) and 8(b) (ii), the claimant or the enterprise referred to in subparagraph 2(b) may initiate or continue an action that seeks interim injunctive relief that does not involve the payment of monetary damages before a court under the law of the respondent.
11. (a) When a claim is submitted under paragraph 2(a) (i) (A) or 2(b) (i) (A), the tribunal shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.
(b) When a claim is submitted under paragraph 2(a) (i) (B) or 2(b) (i) (B), the tribunal shall apply:
(i) the rules of law specified in the pertinent investment agreement, or as the disputing parties may otherwise agree; or
(ii) if the rules of law have not been specified or otherwise agreed, the law of the respondent, including its rules on the conflict of laws.
12. The respondent shall deliver to the non-disputing Party:
(a) notice of arbitration no later than thirty days after the date on which the claim was submitted; and
(b) copies of all pleadings filed in the arbitration.
13. The non-disputing Party may, upon written notice to the disputing parties, make submissions to the arbitral tribunal on a question of interpretation of this Agreement.
14. In an arbitration under this Article, the respondent shall not assert, as a defence, counterclaim, right of setoff or otherwise, that the claimant has received or will receive indemnification or other compensation for all or part of the alleged damages pursuant to an insurance or guarantee contract.
15. The arbitral tribunal may award only:
(a) a judgement whether or not there has been a breach by the respondent of any obligation under Chapter I or under an investment agreement referred to in subparagraph 2(a) (i) (B) or 2(b) (i) (B) with respect to the claimant and its investments; and
(b) one or both of the following remedies, only if there has been such a breach:
(i) monetary damages and applicable interest; and
(ii) restitution of property, in which case the award shall provide that the respondent may pay monetary damages and any applicable interest, in lieu of restitution.
The arbitral tribunal may also award cost and attorney's fees in accordance with applicable arbitration rules.
16. Subject to paragraph 15, in the case of subparagraph 2(b):
(a) an award of monetary damages and any applicable interest shall provide that the sum be paid to the enterprise referred to in that subparagraph;
(b) an award of restitution of property shall provide that restitution be made to the enterprise referred to in that subparagraph; and
(c) the award shall provide that it is made without prejudice to any right that any natural person or enterprise may have in the relief under applicable law.
17. The respondent may make available to the public ina timely manner all documents, including an award, submitted to, or issued by, an arbitral tribunal established under paragraph 4, subject to redaction of:
(a) confidential business information;
(b) information which is privileged or otherwise protected from disclosure under the laws and regulations of either Contracting Party; and
(c) information which shall be withheld pursuant to the relevant arbitration rules.
18. Unless the disputing parties agree otherwise, the place of arbitration shall be in a country that is a party to the New York Convention.
19. The award rendered by the arbitral tribunal shall be final and binding upon the disputing parties. This award shall be executed in accordance with the applicable laws and regulations, as well as relevant international law including the ICSID Convention and the New York Convention, concerning the execution of award in force in the country where such execution is sought.
Article 25. Service of Documents
1. Notices and other documents relating to arbitration under this Chapter shall be served on a Contracting Party by delivery to:
(a) with respect to Japan, Economic Affairs Bureau, the Ministry of Foreign Affairs; and
(b) with respect to the Republic of Armenia, the Ministry of Economic Development and Investment.
2. A Contracting Party shall promptly make publicly available and notify to the other Contracting Party any change to the name of the authority referred to in paragraph 1.
3. Each Contracting Party shall make publicly available the address of its authority referred to in paragraphs 1 and 2.
Chapter III. JOINT COMMITTEE
Article 26. Joint Committee
1. The Contracting Parties shall establish a Joint Committee (hereinafter referred to as "the Committee") upon the request of either Contracting Party with a view to accomplishing the objectives of this Agreement. The functions of the Committee shall be:
(a) to discuss and review the implementation and operation of this Agreement;
(b) to review the non-conforming measures maintained, amended or modified pursuant to paragraph 1 of Article 7 for the purpose of contributing to the reduction or elimination of such non-conforming measures;
(c) to discuss the non-conforming measures adopted or maintained pursuant to paragraph 2 of Article 7 for the purpose of encouraging favourable conditions for investors of the Contracting Parties;
(d) to exchange information on and to discuss investment-related matters within the scope of this Agreement which relate to improvement of investment environment; and
(e) to discuss any other investment-related matters concerning this Agreement.
2. The Committee may, as necessary, make appropriate recommendations by consensus to the Contracting Parties for the more effective functioning or the attainment of the objectives of this Agreement.
3. The Committee shall be composed of representatives of the Contracting Parties. The Committee may, upon mutual consent of the Contracting Parties, invite representatives of relevant entities other than the Governments of the Contracting Parties with the necessary expertise relevant to the issues to be discussed, and hold joint meetings with the private sectors.
4. The Committee shall determine its own rules of procedure to carry out its functions.
5. The Committee may establish sub-committees and delegate specific tasks to such sub-committees.
6. The Committee shall meet upon the request of either Contracting Party.
Chapter IV. FINAL PROVISIONS
Article 27. Headings
The headings of the Chapters and Articles of this Agreement are inserted for convenience of reference only and shall not affect the interpretation of this Agreement.
Article 28. Amendments
This Agreement may be amended by mutual consent of the Contracting Parties, and amendments shall enter into force in the manner as described in paragraph 1 of Article 29 of this Agreement.
Article 29. Final Provisions
1. The Contracting Parties shall notify each other, through diplomatic channels, of the completion of their respective internal procedures necessary for the entry into force of this Agreement. This Agreement shall enter into force on the thirtieth day after the latter of the dates of receipt of the notifications. It shall remain in force for a period of ten years after its entry into force and shall continue in force unless terminated as provided for in paragraph 2.
2. A Contracting Party may, by giving one year's advance notice in writing to the other Contracting Party, terminate this Agreement at the end of the initial ten year period or at any time thereafter.
3. This Agreement shall also apply to all investments of investors of either Contracting Party acquired in the Territory of the other Contracting Party in accordance with the laws and regulations of that other Contracting Party prior to the entry into force of this Agreement.
4. In respect of investments acquired prior to the date of termination of this Agreement, the provisions of this Agreement shall continue to be effective for a period of ten years from the date of termination of this Agreement.